Piraeus turns profitable as Alpha extends losses

Greece’s largest lender Piraeus Bank turned profitable in the second quarter of the year, helped by lower provisions for impaired loans, while rival Alpha Bank extended its loss on higher bad credit charges.

Piraeus, which is 26.2 percent owned by the country’s bank rescue fund HFSF after its recapitalization late last year, on Tuesday reported a net profit of 20 million euros after a net loss of 37 million euros in the first quarter.

Alpha, Greece’s fourth-largest lender by assets, widened its loss in the Q2 after booking higher provisions for impaired loans, including those by Greece’s biggest supermarket chain Marinopoulos.

Alpha, 11 percent owned by HFSF after its recapitalization, on Tuesday reported a net loss of 16.8 million euros after a bottom line loss of 2.2 million euros in the first quarter.

The bank’s nonperforming credit rose to 37.8 percent of its loan book at the end of June from 37.4 percent at end-March.

Provisions for bad debt rose 37 percent quarter-on-quarter to 349.7 million euros.

Greek banks still carry large problem loan portfolios after a deep, protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.

More than 40 percent of the sector’s loans are nonperforming, making the reduction of bad loan stock the biggest swing factor for Greek lenders as they continue to provision for impaired credit.

[Reuters]